Equity Investments

9 Months Ended

Sep. 30, 2015

Equity Method Investments and Joint Ventures [Abstract]

Investment in SIR

SIR is a REIT that is primarily focused on owning and investing in net leased, single tenant properties. SIR was an unconsolidated equity method investment from July 2, 2013 until July 9, 2014. On July 9, 2014, we sold our entire stake of 22,000,000 common shares of SIR. As a result of this sale, we no longer hold any interest in SIR.

For the three and nine months ended September 30, 2014, we recorded equity in earnings of $1.1 million and $24.5 million, respectively, related to our investment in SIR on our condensed consolidated statement of operations. During the nine months ended September 30, 2014, we received cash distributions from SIR totaling $20.7 million.

The following unaudited summarized income statement information of SIR for the period from July 1, 2014 through July 9, 2014 and for the period from January 1, 2014 through July 9, 2014 is as follows (in thousands, except per share data):



	For the Period from July 1, 2014 through July 9, 2014			For the Period from January 1, 2014 through July 9, 2014
Rental income	$	4,698		98,226
Tenant reimbursements and other income	923			16,980
Total revenues	5,621			115,206

Operating expenses	1,018			20,982
Depreciation and amortization	1,043			20,832
Acquisition related costs	—			374
General and administrative	357			7,731
Total expenses	2,418			49,919
Operating income	3,203			65,287
Interest expense	(295		)	(7,287		)
Gain on early extinguishment of debt	—			243
Income before income tax expense and equity in earnings of an investee	2,908			58,243
Income tax expense	—			(90		)
Equity in earnings of an investee	11			32
Net income	$	2,919		$	58,185
Weighted average common shares outstanding	59,889			52,394
Net income per common share	$	0.05		$	1.11

Investment in AIC

As of May 9, 2014, we had a net investment of $5.8 million in AIC, an insurance company that was owned in equal proportion by us, our former manager Reit Management & Research LLC (RMR), SIR and five other companies to which RMR provides management services.

On May 9, 2014, as a result of the removal of the former Trustees and in accordance with the terms of the shareholder agreement between us and the other AIC shareholders, the other AIC shareholders exercised their right to purchase all of the 20,000 shares of AIC we then owned. We received $5.8 million in aggregate proceeds from this sale. We no longer own any interest in AIC. For the period from January 1, 2014 through May 9, 2014, we recorded equity in loss of $0.1 million related to our investment in AIC on our condensed consolidated statement of operations.

Our participation in the AIC property insurance program expired in June 2014. See Note 17 for additional information about our investment in AIC.